Like Britain, Germany needs to rebalance its economy. But whereas the UK tends to live beyond its means, consuming and importing too much, Germany has the opposite problem. The sharp slowdown in 2012 growth shows just how vulnerable Europe's biggest economy is to events in the rest of the world.

After posting strong growth of 4.2% in 2010 and 3% in 2011, Germany came down to earth with a bump last year. National output expanded by 0.7%, and although Berlin has yet to publish data for the final three months of 2012 the government is pencilling in a fall in gross domestic product of around 0.5%.

Two key factors lie behind the current slowdown. Firstly, life has been a lot tougher in 2012 for German exports. The impressive recovery in 2010 was largely due to global demand for Germany's precision manufacturing goods, particularly the machine tools needed by the bigger developing countries for their industrialisation programmes. That demand cooled in 2012, with the uncertainty caused by the US fiscal cliff row further affecting export sales.

Secondly, the euro finally took its toll both on exports and investment. The sharp contractions in Greece, Spain and Portugal, together with budget cutbacks and slower growth in other eurozone member states, has not only fed through into weaker order books for German firms, it has also made them more cautious about spending money on new plant and machinery.

Eurozone crisis: It ain't over yet | vox

The Eurozone policy response to the crisis, fiscal tightening and reinforced constraints on Eurozone national borrowing to prevent moral hazard, is not only imparting a recessionary impact on the Eurozone, but it is also aggravating the `original sin' of the euro: asymmetry.

Thus, in a context of scarce international labour mobility and lack of wage and price flexibility in some Eurozone countries, the lack of an operative ex-post transfer/insurance scheme becomes even more serious.

The problem is a very difficult one. A centralised `ex-post' transfer scheme is necessary, but does not seem to be politically feasible. The adopted Macroeconomic Imbalances procedure, a mere `ex-ante' monitoring device - akin to a score board - for detecting `asymmetries' is probably counter-productive. Instead of transferring resources to countries suffering shocks, it punishes them.

The longer-term prospects for the survival of the euro not only are not improving, they are actually getting worse.